MICRON TECHNOLOGY, INC., REPORTS RESULTS FOR THE FIRST QUARTER OF FISCAL 1999
Boise, Idaho, December 23, 1998 -- Micron Technology, Inc., today reported a net loss for the first quarter of fiscal 1999 ended December 3, 1998, of $46 million, or $0.19 per share-diluted, on net sales of $794 million. For the fourth quarter of fiscal 1998, the Company's net loss was $93 million, or $0.43 per share-diluted on net sales of $692 million. The net loss was lower in the first quarter of fiscal 1999 compared to the fourth quarter of fiscal 1998 primarily as a result of improved pricing for the Company's semiconductor memory products. For the first quarter of fiscal 1998, net sales were $957 million and net income was $7 million, or $0.03 per share-diluted.
The average selling price for the Company's primary semiconductor product, the 64 Meg SDRAM, increased 8% in the first quarter of fiscal 1999 as compared to the fourth quarter of fiscal 1998. The Company experienced a 60% decline in average selling prices per megabit for fiscal 1998. Primarily as a result of the modest price improvements, gross margins on semiconductor products improved to a positive 9% in the first quarter of fiscal 1999 as compared to a negative 10% in the fourth quarter of fiscal 1998. In the first quarter of fiscal 1999, total semiconductor memory output increased approximately 10% as compared to the fourth quarter of fiscal 1998. The Company's cost per megabit of semiconductor memory sold remained unchanged comparing the first quarter of fiscal 1999 with the fourth quarter of fiscal 1998 as cost improvements achieved in the Company's Boise operations were offset by higher costs per megabit incurred at the semiconductor memory manufacturing sites acquired from Texas Instruments Incorporated ("TI"). The Company's results of operations for the first quarter of fiscal 1999 include two months of operations for the acquired TI facilities.
Steve Appleton, Chairman, CEO and President commented, "Our accelerated transition to .21 mu line width processes is progressing and we are well positioned to execute our technology roadmap. Our global integration teams are continuing their intense efforts to implement Micron's products, processes and technology in the acquired TI facilities. The technology transition is on schedule and expected to be substantially complete in the next nine to twelve months."
Unit sales of the Company's PC systems increased 21% in the first quarter of fiscal 1999 as compared to the fourth quarter and were 2% higher than the first quarter of fiscal 1998. Average selling price for PC systems decreased 5% in the first quarter of fiscal 1999 as compared to the fourth quarter and 23% as compared to the first quarter of fiscal 1998 due primarily to a more aggressive pricing strategy, particularly on notebook products.
The Company's cash and liquid investment balance increased from $650 million as of September 3, 1998 to $1,925 million as of December 3, 1998 primarily due to financing received in the TI memory acquisition and an equity investment by Intel Corporation. The Company's balance sheet also reflected an increase in long-term debt of $839 million primarily as a result of the TI transaction.
Statements contained in this press release that are not purely historical are forward-looking statements and are being provided in reliance upon the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release include, without limitation, statements regarding technology transitions. All forward-looking statements are made as of the date hereof and are based on current management expectations and information available to the Company as of such date. The Company assumes no obligation to update any forward-looking statement. It is important to note that actual results could differ materially from historical results of those contemplated in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to those identified in the Company's filings with the Securities and Exchange Commission.
Micron Technology, Inc., and its subsidiaries manufacture and market DRAMs, very fast SRAMs, Flash, other semiconductor components, memory modules, graphics accelerators, personal computer systems, and radio frequency identification (RFID) products. Micron's common stock is traded on the New York Stock Exchange (NYSE) under the symbol MU. To learn more about Micron Technology, Inc., visit its web site at www.micron.com
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MICRON TECHNOLOGY, INC. CONSOLIDATED FINANCIAL SUMMARY
(Amounts in millions except per share data)
SELECTED RESULTS OF OPERATIONS
QUARTER ENDED
DEC. 3, 1998
NOV. 27, 1997
SEP. 3, 1998
Net sales (1)
Semiconductor memory products
$428.1
$440.1
$372.4
Personal computer systems
352.1
445.1
307.9
Other
13.4
72.1
11.8
Total net sales
793.6
957.3
692.1
Costs and expenses:
Cost of goods sold
677.7
747.1
651.3
Selling, general and administrative
103.0
126.0
100.1
Research and development
67.7
67.2
76.6
Other operating expense (income), net
7.8
4.6
2.1
Total costs and expenses
856.2
944.9
830.1
Operating income (loss)
(62.6)
12.4
(138.0)
Loss on sale of investments
(0.1)
0.0
(0.1)
Gain on issuance of subsidiary stock,
net
1.1
0.1
0.5
Interest expense, net
(7.9)
(1.3)
(1.8)
Income (loss) before income taxes
and minority interests
(69.5)
11.2
(139.4)
Income tax benefit (provision)
27.6
(4.5)
52.0
Minority interests in net income
(4.3)
(0.2)
(5.9)
Net income (loss)
($46.2)
$6.5
($93.3)
Earnings (loss) per share
Basic
($0.19)
$0.03
($0.43)
Diluted
($0.19)
$0.03
($0.43)
Number of shares used in per share calculations (2)
Basic
245.7
214.7
216.8
Diluted
245.7
217.8
216.8
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SELECTED CASH FLOW DATA
DEC. 3, 1998
NOV. 27, 1997
Depreciation and amortization
$189.5
$136.3
Net cash provided by operating activities
255.6
182.1
Expenditures for property, plant and equipment
(117.5)
(187.9)
Net cash used for investing activities
(1,181.0)
(410.8)
Net proceeds from issuance of debt and equity
in TI purchase transaction
681.1
0.0
Payments on equipment purchase contracts
(73.9)
(12.9)
Proceeds from issuance of debt
34.0
11.4
Repayments of debt
(28.3)
(49.7)
Net cash provided by (used for) financing activities
1,134.3
(48.4)
Net increase (decrease) in cash and equivalents
208.9
(277.1)
Equipment acquisitions on contracts payable
and capital leases
$18.3
$24.6
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SELECTED FINANCIAL DATA
DEC. 3, 1998
SEP. 3, 1998
Cash and liquid investments
$1,924.8
$649.6
Receivables
481.6
489.5
Inventories
360.4
291.6
Total current assets
2,849.7
1,500.9
Property, plant and equipment, net
3,602.3
3,035.3
Total assets
6,787.6
4,703.5
Accounts payable and accrued expenses
627.8
460.7
Short-term debt
11.1
10.1
Current portion of long-term debt
103.4
98.6
Total current liabilities
861.7
745.7
Long-term debt
1,597.6
758.8
Shareholders' equity
$3,836.2
$2,701.3
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All financial data has been restated to reflect the pooling of interests with Rendition, Inc. that occurred September 11, 1998.
(1) The value of the Company's semiconductor memory products included in PC systems and other products is included under "Semiconductor memory products." "Other" revenue in the first quarter of 1998 includes $60.6 million in revenue from contract manufacturing and module assembly services, which was sold in the second quarter of fiscal 1998.
(2) The calculation of weighted average shares outstanding for the period ended December 3, 1998, results in inclusion of 20.3 million of the 28.9 million shares related to the TI transaction, 8.0 million of the 15.8 million shares related to the investment by Intel and 3.6 million shares issued to the Rendition shareholders.
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